I JOURNALIZING EXERCISE

Journalize the following transactions. Use worksheet.

Transactions
1. Ms JANE FONDA established a Fitness Center with the following investments:  Cash of
P500,000 and borrowed an equal amount from her father giving him a promissory note.
2. Purchased a tread mill machine for P350,000 from Toby’s Equipment.  Paid P50,000
down, balance on account.
3. Received P12,000 cash from a client for a package of six physical training sessions.
4. Discussed an engagement with a prospective client over lunch. Paid P3,000 for the
meal.
5. Rendered physical training sessions to a client on account,  P2,000.
6. The physical training assistant was given a cash advance of P1,000.
7. Received the bill from MAYNILAD, P500.
8. Paid the salary of the physical training assistant for the month, P18,000.
9. Received P5,000 from No. 6 client to apply on account.
10. Paid the monthly rent, P10,000.
11. Ms. JANE paid the Meralco bill for her residence from the business funds, P3,800.

II PROBLEM SOLVING EXERCISE  Solve the problems below. Present your solutions in good
accounting format in your worksheet.
     
1. At the beginning of the year, liabilities of San Juan Services amounted to P360,000. During the
year, the assets increased by P480,000 and at the end of the year assets amounted to P1,080,000.
Liabilities decreased by P60,000 during the year. How much is the owner’s equity at the start of
the year?

2.  The following information were gathered from the records of an accounting firm: Professional Fees
P560,000,  three-fourth of which has not yet been collected as of year end. Expenses already paid
P300,000 and P100,000 to be paid next year.  How much is the net income for the year?

3. If total assets decreased by P40,000 during a period of time and capital increased by P120,000
during the same period.  What is the amount of change in total liabilities?  Indicate whether
increase or decrease.

4. Atty. A. T. Lo opened a law firm on January 1, 2009 by investing cash of P50,000, and furniture &
equipment of P45,000. She hired a secretary for a monthly salary of P8,500 and signed a lease
contract for a monthly rental of P15,000. He rendered legal services and billed the clients
P120,000 but the clients still owe him P35,000. The utilities expense amounted to P7,500 for two
months but February bill is still unpaid. He bought and paid for supplies worth P6,000 of which
P4,200 have been used up. What was the result of the business operation after two
months?